How can both sides cave on debt, but we still don’t have an agreement?

I didn’t think the ongoing debt ceiling negotiations could get any more bizarre. The Democrats now are to the right of the Republicans, but they must have missed each other in passing because they still can’t agree. Unbelievable.

This was written by Iron Knee. Posted on Tuesday, July 26, 2011, at 2:18 pm. Filed under Irony. Tagged Congress, Deficits. Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.

21 Comments

Dan wrote:

I Love the end of this, Jon is dead on with his assessment.

What I find ironic is that the same rating agencies that gave AAA ratings to the crap Wall Street was peddling, which became the troubled assets, that Hank Paulson paid $1.00 on $0.70 for when we bailed out the banks, are the same agencies that are saying they will down grade the nation’s credit rating, which we could avoid, in part, by raising the taxes on the multi-million dollar incomes of the bankers that caused the economic crisis in the first place, and will be the first ones to benefit when the government has to pay higher interest rates.

Yes, this has crossed into the surreal. 4 years ago Senator Obama was vehemently opposed to raising the debt ceiling because it was irresponsible leadership and fiscally unsound. That sounds just like the Tea Party? So if Obama was a founding member of the Tea Party why does he disagree with them now? Why do the republicans who fought to raise the debt ceiling under Bush now oppose it. If they were the card carrying members of the democrat party then why have they abandoned those principals in favor of following the radical then leader of the Tea Party Obama?

I am confused to say the least. We live in a paradoxical world where positions are juxtaposed. I got it, Washington has slipped into a 4th dimension for which we seem to be able to view in, but they cannot view out and don’t realize what’s happened. The still think they are in our world.

Ok, wave goodbye to them and lets elect a real government as they obviously can’t be saved unless Capt Kirk and Spock return from the future to save the day. Elections next week everybody.

I have lots of sympathy for the “throw the bums out” sentiment, but I strongly suspect that even that has been co-opted by the wealthy and powerful in order to advance their agenda (just like what happened with the Tea Party).

As for your question “if Obama was a founding member of the Tea Party why does he disagree with them now?” there is a simple answer. Four years ago we didn’t have a financial crisis that requires stimulus spending. Also, the Republicans have never been concerned about the debt ceiling. As has been shown over and over again, they just use it as an excuse to push their agenda.

1032, but I agree with you. Infrastructure spending to get us out of a recession is WAY better than spending on stupid wars and welfare to large corporations who don’t need it (and distorts the free market, causing all kinds of problems).

Continuing deficit spending because of unsustainably low revenues and unsustainably high spending IS a failure of leadership – Congressional leadership. People seem to have forgotten that all tax and spending legislation happens in the Congress – specifically, in the House.

Keep in mind, there is NO LOGICAL REASON that we need to have deficit spending for more than a single year, and no reason we couldn’t pay any debt back the next year – if the Congress passed a balanced spending and taxation set of legislation. Yes, of course there are incredible circumstances that could require deficits bigger than a year’s recovery, but we haven’t actually seen any crisis like that since WWII.

This debacle isn’t because they can’t CREATE a balanced budget – it’s because they can’t pass one. Can’t pass it through the House because they refuse to increase revenues, can’t pass it through the Senate because they refuse to accept the draconian cuts to government, Medicare, and social safety net programs that would be required without more revenue.

When Barack Obama was a Senator, he correctly railed against the failed leadership of the Congress. Now he is the President, and he is still railing at the failed leadership of the Congress. And he has been right BOTH times.

I just want to second Arthanyel’s comment about the failure of Congress. Everyone is acting as if the President is someone in charge of this, including many members of Congress on both sides. In fact, Congress is in charge of the budget. It is their constitutional responsibility. For members of Congress to act otherwise is to confirm their ignorance of the Constitution and to abdicate their legal responsibilities.

If there is a theme to Obama’s presidency so far, I’d say that it is trying to restore the balance of responsibilities between the Executive and the Congress closer to what the Constitution requires. This will require Congress to actually be slightly more concerned about governing than they are currently appear to be.

BTW – Obama has actually admitted that his no vote on the debt ceiling as a senator was a naive political move by a freshman senator. Owning up to mistakes is something that we aren’t seeing right now by members of Congress.

Obama has admitted that voting against raising the debt ceiling was a naive political move. But not only is he willing to admit a mistake, but it also shows that he is deeply concerned about deficits. But as usual he is not taking a knee-jerk, ideological attitude. The situation is more complex. I just wish Congress could see this and work to actually solve the problem, rather than just trying to score political points.

I understand his naivete on the debt ceiling and part of the problem is we have like 120 freshmen in congress. Will they be as easily forgivenif in the future when its their turn to raise the debt ceiling they explain it similarly?
I fully agree with the view the the ceiling needs to be raised, the full faith and credit of the US cannot be questioned. However, we also need to seriously look at the debt and the debt itself IMO doesn’t seem to be getting the same amount of serious consideration as the limit. I don’t blame the Repubs for using the only serious matter to make their point, its strong politics, but I hope cooler heads prevail and they do what’s needed, however unplesant it may seem at the moment.

PatriotSgt – Unfortunately, it does not appear to me, that many of House Republicans are taking the conditions that created the debt very seriously. They said so at first but when Obama and the Democrats called their bluff and agreed to include budget restructuring as part of raising debt ceiling, they showed that they were not in fact willing to take it seriously. Instead, they seemed to only be concerned with ideological purity. Or getting re-elected.

If they were truly concerned about getting re-elected, they would have compromised already. Unfortunately, the forces in the Republican Party that have been following Grover Norquist realize that if they give up now, they will NEVER have another opportunity to make their vision a realtiy so they simply will not give. At all.

The only way this gets fixed is if Boehner can get enough non-Tea Party Republicans to pass a bill with all the Democrats.

Sovereign governments such as the United States can print new money. However, there’s a statutory limit to the amount of paper currency that can be in circulation at any one time.

Ironically, there’s no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

The government can also raise money through sales: For example, it could sell the Federal Reserve an option to purchase government property for $2 trillion. The Fed would then credit the proceeds to the government’s checking account. Once Congress lifts the debt ceiling, the president could buy back the option for a dollar, or the option could simply expire in 90 days. And there are probably other ways that the Fed could achieve a similar result, by analogy to its actions during the 2008 financial crisis, when it made huge loans and purchases to bail out the financial sector.

Arthanyel – It appears that the Republicans who are still in their right mind were willing and capable of compromising. It’s the truly right wing and Tea Party types that are refusing anything short of burning down our economic house.

I do think that it is logical for Tea Party types to hold to their ideological guns on this since that’s what got them elected in the first place (at least that what they believe and is likely to be true). And many of them are in districts gerrymandered to be safe. Unless there is a real effort to change their districts with the 2011 redistricting process, it would completely logical (although not entirely rational) to believe that what would get them re-elected is not “caving” into any effort that would make Obama or the Democrats look good.

What would be interesting to know is how many House Republicans who are still refusing to compromise have received how many phone calls, emails, etc from constituents telling them to compromise. I think that would be a better measure of whether they are interested in re-election versus simply being stubbornly ideological.

It’s just about 11 pm EST and a half hour ago, it looks like the House plan may be dead. Again.

@Starluna, agree there are still some reasonable Republicans and if there is going to be an actual solution then it will be those Republicans and the Democrats who have to carry it off. The Tea P{arty has made it clear they have to be counted as the enemy for any bill that can get through the Senate.

The Tea Party member’s behavior only makes sense from a purely political standpoint, or from a fanatical one. Either they don’t care about the country and they are playing the game for political purposes (in which case they are no better than any other politicians and we should get rid of them when we can) or they are truly so fanatical that they are willing to set the country’s economy on fire rather than give an inch (in which case they are dangerous and we should get rid of them when we can).

Either way, we need to get rid of them. And their ability to retain their seats is in no way safe – because independents are likely to swing violently the other way after this debacle, Republican registration is dropping, and there is a civil war inside the Republican party that might fracture the entire group.

A fantastic independent candidate for President would have a real shot in 2012, I believe, but I don’t see one anywhere and no one can name a candidate. I haven’t even been able to get any reasonable feedback on designing a candidate 🙂 My current Plan C would be to put a great actor up for election (Morgan Freeman? Tom Hanks?) and have them PLAY the ideal President.

I’d choose fanatical. Wrecking the government is OK if you hate the government. Part of the problem is that they have delusions of “how it used to be,” back in the day when men were men and being a patriot meant something! Oh yea, and disease was rampant and the life span was horrible…but who cares about those nuggets?

They truly feel like forcing part of the government into destruction would be a great thing because they don’t understand what it is like to live through hardship. They don’t understand what it is like to survive with a family through anarchy. In their mind, everyone will just start wearing triangle hats and magically helping out their fellow man. Essentially, that default will “reset us back some years” and then make everything better. I have read countless comments from people on conservative websites who have said almost verbatim that if we default on Aug 2, that by next year our economy will be thriving, unemployment will be down to ~6%, etc.